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SHOWGROUNDS across NSW are set to suffer because a ban on tourist camping in the Murwillumbah Showground is to be applied state-wide.

The government-imposed ban follows pressure from operators of private caravan parks as well as a government department which is involved in running profit-making tourist parks on other Crown land.

The ban of camping in the Murwillumbah showground last week incensed the town's business people, who said it discouraged tourists.

Following a Tweed Daily News investigation, which tracked the ban to a new policy of the former NSW Department of Lands, now the Land and Property Management Authority, the NSW Government has been accused of a conflict of interest, acting like Ned Kelly and disregarding the needs of tourists with large vehicles or those travelling with horses or dogs.

The policy follows a "working group" set up by the state Labor government which took advice from lobbyists including the Caravan and Camping Industry Association (CCIA) which argued showgrounds did not pay the same rents or meet the same standards as private caravan parks.

Tweed mayor Warren Polglase, a former owner of caravan parks at Chinderah and former board member of the CCIA, says the arguments are nonsense.

"They are taking a Ned Kelly-approach to the showgrounds. Those funds go towards the maintenance of showgrounds," said Cr Polglase.

"To take this cavalier approach is totally inappropriate to regional New South Wales. The government has its own caravan parks on Crown land and I would say they have a severe conflict of interest.

"This is just so wrong."

Cr Polglase pointed out the ban affected people travelling with large horse floats with caravan accommodation, often on their way to horse events, and even people with dogs.

"There may be one caravan park on the Tweed that takes animals," he said.

"And they definitely would not take horses"

CCIA chief executive Barry Baillie defended the ban, saying a working group involving his organisation, the Departments of Planning and Tourism, the Local Government and Shires Association of NSW and the Campervan and Motorhome Club of Australia had "agreed on the outcome".

"It looked at all the issues of what we called illegal camping," Mr Bailie said.

"A showground must comply with the same regulations that a caravan park in the same area complies with. They should not be undercutting commercial business in the same town."

"There can only be one resolution and that is compliance with the law."

National Party MP for the state seat of Lismore Thomas George said some large camper vehicles would not even fit in caravan parks.

"Some councils also don't want them pulling up on the side of roads, you need the likes of showgrounds," he said.

"Not only is this taking income from the showgrounds, but it is indirectly taking income away from the community."